Any debts incurred during the marriage are presumed to be debts of the community. Any debts incurred prior to marriage are the separate debts of the party who incurred them. However, the party trying to argue a debt should be separate would need to prove the debt existed prior to marriage to prove its separate nature.
The only way a debt incurred during the marriage can be confirmed as a separate debt would be if there was a written agreement for the creditor to look only to the separate estate of the party, not to the community estate. One spouse applying for the credit individually is not the same as the creditor agreeing only to look to her separate estate for payment.
The court will divide debts as part of a “just and right” division of the entire community estate. However, the court does not have the ability to influence a third party creditor. Even if the court awarded a debt to a certain party, the creditor would look to the person whose name is on the debt to pay it (regardless of who the court ordered to pay it in a divorce decree). Normally debts are either paid off with available assets or proceeds from the sale of property or the person whose name the debt is in takes it (but is often compensated with additional property to make up for it).
The court will look at the following factors when determining how to allocate debt in a manner that is “just and right”: (1) the spouse’s ability to pay; (2) the property securing the debt (if a party takes the property security the debt, that party takes the debt); (3) the relationship to the creditor (if wife borrows from wife’s family, she’ll end up with that debt); and (4) the party responsible for creating the debt.
It is extremely common for clients to have concerns about credit card debt the other party has accumulated. If the charges on the credit card are for ordinary living expenses, those will definitely be considered community debts and will very likely divided 50/50. (This doesn’t mean each is paying half of the credit card bill, it just means we are factoring in a 50/50 split of the debt into the division of the estate.) If the wife is buying gifts for her boyfriend on the card, then she is most likely going to get hit with that debt. If the husband is just a spender, it’s most likely going to be divided 50/50. If someone is doing really insane, crazy spending, then they may end up taking a bigger portion of the debt.
Student loans will almost always go with the person who received the education tied to the student loans. Secured debts generally go with the property to which they are secured. For example, if the parties have a car with a loan, the spouse who takes the car will take the loan. If that loan is in both parties’ names (or the name of the spouse not taking the car), the spouse taking the car will generally have to refinance into his or her own name within a certain amount of time. If he or she cannot do that, then the car usually must be traded in or sold.